SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).

By Rob Isbitts

The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

Frequently Asked Questions About Compounding Pharmacies

If you are facing the need to use a compounding pharmacy for the first time, there’s little doubt that you have questions. Compounding pharmacies are available, but they are not commonly used by most patients. Here are the most frequently asked questions about these pharmacies.What Is a Compounding Pharmacy?In essence, this type of pharmacy is one that customizes medications that are not commercially available. Medications are prescribed by a physician, veterinarian, or other medical provider. The medications are then compounded, or put together, by a state-licensed pharmacist. These pharmacies are typically utilized for people and animals that have unique health concerns that commercially available medications cannot address.Are These Types Of Medications Safe?You must understand that compounded medications are off-label. This means that the FDA does not approve them. That said, compounded medications are considered safe when put together and sold by reputable pharmacists. Before you order or ask for a compounded medication, ask your doctor to recommend a pharmacist or pharmacy. Not all professionals are skilled in the art of compounding medications.Why Do I Need This Medication?There are a variety of reasons why you may need a compounded medication. For example, if your pain management drug is difficult for you to swallow, your pharmacist may suggest a liquid or transdermal version. If you are experiencing sensitivity to an ingredient in your hormone replacement, your doctor may have a medication compounded without that particular ingredient.Compounded pharmacies also make medications for veterinary patients. Often, flavoring is added or liquid is made in order to increase palatability for a pet.Where Do Medication Ingredients Come From?The ingredients that are put into compounded medications come from the same suppliers as the big pharmaceutical companies. These companies are inspected and regulated by the FDA. The ingredients in your compounded medications are considered safe for consumption.Who Regulates These Pharmacies?Just like typical pharmacies, compounded pharmacies and pharmacists are licensed at the state level. There is also an entity known as the Pharmacy Compounding Accreditation Board (PCAB) that has developed national standards that compounding pharmacies must follow.Does the FDA Inspect Compounding Pharmacies?The FDA does not inspect compounding pharmacies, but this should not dissuade you from making use of their services. The FDA does not inspect typical pharmacies. The regulation of pharmacies and pharmacists has always been handled by individual states. The FDA does, as has been stated, inspect and regulate the facilities that produce the ingredients that go into these medications.Compounding pharmacies are on the rise as people become more aware of them. Up until the 20th century, all pharmacies were of the compounding type. It wasn’t until just a century ago that the pharmacies we are used to seeing today arose. If your doctor suggests a compounded medication, you can feel safe in taking it. Follow the same safety protocols as you would with a typical medication, and speak with your doctor should you experience any adverse events.

Brain Nutrition – The Importance of Nourishing Your Greedy Brain

We’ve all heard the phrase “you are what you eat.” When it comes to the brain, our most important organ, this idea that we become what we put into our bodies through nutrition takes on even greater meaning. The importance of brain nutrition becomes quite obvious when we consider a few key factors. The brain consumes a disproportionately large portion of the nutrients ingested by the body. The function of brain cells is heavily impacted by these nutrients available in the brain. The functioning of our brain cells determines how we function. Thus our mood, attention, memory, etc., are all functions of brain nutrition.The Greedy Brain – Why 40 Percent Of All Your Nutritional Intake Is Actually Brain NutritionOur intelligent body knows how important the brain is and so allocates its resources accordingly, allowing the brain to consume a disproportionately large portion of the nutrients we ingest. The brain weighs only 1 to 2 percent of your total body weight, but 20 percent of the air you breathe, 25 percent of your blood flow, 30 percent of the water you ingest, and 40 percent of the nutrition in your bloodstream is sent to be consumed by the brain. This means that 40 percent of your nutritional intake can be directly thought of as brain nutrition.Nutrition’s Powerful Influence Over Brain FunctionNutrients available to the brain have a huge impact on the healthy functioning of our brain cells or neurons. Nutrients affect neuronal function either directly, being metabolized without precursors, or indirectly, by affecting production of other substances in the brain that determine brain cell function.The billions of brain cells or neurons communicate via neurotransmitters — including serotonin, dopamine, and norepinephrine — that send signals through the brain’s complex of pathways. Brain function is determined in large part by the action of these chemical messengers. Losing mental agility in old age, for example, may result from the brain cells’ failing to communicate effectively rather than from cell death. Proper brain nutrition influences the production and action of neurotransmitters. For instance, research shows higher levels of the neurotransmitter dopamine in lab rats that are fed blueberries, which are rich in antioxidants. Dopamine, in turn, is important for cognition, motivation, mood, attention, and learning.Other examples of nutrients which affect brain function include tyrosine, an amino acid found in protein which also supports the action of important neurotransmitters; the mineral magnesium, which can reduce hyperactivity and irritability; and omega-3 fatty acids, which can improve mood, attention, and alertness.Brain Nutrition Is Super Important To Your Well-being And Your LifeThus, nutrition has a huge impact on how we feel, think, and function. Our emotions, our memory, our ability to concentrate and accomplish tasks, and hence our lives are heavily impacted by what we put into our bodies, be it food, nutritional supplements, or drugs.Makes you think twice about eating that big mac or drinking that coke, doesn’t it? Makes you want to check the nutritional information of everything you buy at the grocery store, right? It makes you want to find out exactly what foods and supplements are beneficial for brain function and which are detrimental. You might think to yourself: what a drag! Well, the negative impact of ignorance on your brain is an even bigger drag. Knowledge is power. Now go and use brain nutrition to empower your mind and your life!